Bitcoin Miners Fleeing China Could Overload Siberia’s Power Grid

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By Áine Quinn

(Bloomberg) —

A Siberian region known for its cheap electricity warned that a flood of Bitcoin miners from nearby China could overload its power grid after Beijing cracked down on cryptocurrency production. 

Retail energy consumption in the Irkutsk region this year is up 159% from 2020 levels due to an “avalanche” of underground crypto-mining, Governor Igor Kobzev said in a letter to Russian Deputy Prime Minister Alexander Novak, in which he called for higher electricity rates for miners. The problem has been exacerbated by China’s ban on mining that led to computing equipment being moved over the border, he said. The letter, reported in the local press, was confirmed by a spokeswoman for Kobzev.

“The situation is an unpredictable event for the region, and is leading to significant loads on the power grid with the risk of accidents and emergencies,” the letter said. 

Irkutsk, which relies heavily on hydroelectric power and boasts the cheapest retail electricity in Russia, was already a local center for the energy-intensive mining of Bitcoin before the Chinese ban. China, which as recently as April had nearly half of the computing power used in mining, has cracked down on production, forcing miners to seek new locales from Kazakhstan to the U.S. 

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